Tata Steel has deposited an advance tax of Rs 180 crore (Rs 1.80 billion) for the second quarter, which indicates that the company is set to post record profits.

Tata Steel vice president (finance) R C Nandrajog, however, refused to comment, saying it is price sensitive information.

Advance tax is a function of profit and hence is an indication of the company's profits. Companies have to pay 15 per cent of profits in the first quarter and cumulative 45 per cent by September 15, which implies that in the second quarter 30 per cent is payable.

Hence, if the company paid Rs 180 crore as advance tax in the second quarter then profits were likely to be in the region of Rs 600 crore (Rs 6 billion).

It may be mentioned, Tata Steel's profits for the whole of last year was at Rs 1,012.3 crore (Rs 10.12 billion), which made the company economic value added positive.

The company posted Rs 267 crore (Rs 2.67 billion) profit in the first quarter, which puts profits for the first half at around Rs 867 crore (Rs 8.67 billion), taking into consideration this quarter's profits.

The first two quarters are typically dull for steel companies. Sales normally pick up in the latter half of the year. Hence, the company is all set for a stellar performance this year.

Analysts said the performance was on the back of successive rounds of price hikes since July.

Prices increased by around Rs 3,200-3,300 during January-March, dipped by Rs 2,200-2,300 during April-June and has seen at least two rounds of price hikes since July.

Industry sources said, the outlook for the second half of the year also appeared to be good and prices were likely to be stable.